Post-Audit Statement of Accounts 2019 to 2020
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Public Statement of Accounts 2019-20 Peter Handford BA(Hons) PGCert FCPFA Director of Finance & ICT CONTENTS PAGE Narrative Report 2 Statement of Responsibilities for the Statement of Accounts 25 Comprehensive Income and Expenditure Statement 26 Balance Sheet 27 Cash Flow Statement 28 Movement in Reserves Statement 29 Notes to the Core Financial Statements 30 Accounting Policies 114 Auditor’s Opinion - Derbyshire County Council Accounts 141 Pension Fund Accounts 145 Auditor’s Opinion - Pension Fund Accounts 202 Glossary of Terms 205 Contact Information 221 Annual Governance Statement 222 1 NARRATIVE REPORT Introduction This Statement of Accounts presents the overall financial position of the Council for the year ended 31 March 2020. It has been produced in compliance with the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on Local Authority Accounting (the Code), based on International Financial Reporting Standards (IFRS). IFRS are made up of a combination of many individual accounting standards. This document also includes information relating to the Derbyshire Pension Fund, which the Council administers on behalf of its own staff, other local authorities and other admitted bodies. Basis of Preparation and Presentation W hen preparing the accounts, an authority need not comply with the Code, as to both disclosure and accounting principles, if the information is not material to the “true and fair” view of the financial position, financial performance and cash flows of the authority and to the understanding of users. Information is material if omitting it, or misstating it, could influence decisions that users make on the basis of financial information about a specific authority. The Accounting Policies of the Council have been prepared in accordance with IFRS, as adopted by the Code. W here there is no specific guidance in the Code, the Council has developed its own Accounting Policies, which are aimed at creating information which is relevant to the decision-making needs of users and reliable, in that the financial statements: • represent fairly the financial position, financial performance and cash flows of the entity; • reflect the economic substance of transactions, other events and conditions and not merely the legal form; • are neutral i.e. free from bias; • are prudent; and • are complete in all material respects. The Council’s Accounting Policies outline how the Council should account for all income, expenditure, assets and liabilities held and incurred during the 2019-20 financial year. The Accounting Policies of the Council are updated annually to reflect any changes in IFRS, including changes in International Public Sector Accounting Standards (IPSAS), HM Treasury guidance, CIPFA guidance or any other change in statute, guidance or framework impacting on the Council’s accounts. The Accounting Policies of the Council, as far as possible, have been developed to ensure that the accounts of the Council are understandable, relevant, free from material error or misstatement, reliable and comparable. 2 NARRATIVE REPORT Explanation of the Accounting Statements which follow • Comprehensive Income and Expenditure Statement (CIES) - This shows the cost of providing services in accordance with generally accepted accounting practices. • Balance Sheet (BS) - This shows the value of all assets and liabilities. Reserves are matched against net assets and liabilities. • Cash Flow Statement (CFS) – This statement shows the changes in cash and cash equivalents of the Council. • Movement in Reserves (MiRS) – This shows the movement on the different reserves held, analysed into ‘usable reserves’ (i.e. those that can be applied to fund expenditure) and ‘unusable’ reserves. • Notes to the Accounts – Not a statement, however they provide supplementary information. Performance Local authorities can present the CIES based on how an authority is organised and funded. The Council has presented its CIES on the basis of how it reports its management accounts during the financial year, which is by Cabinet Member Portfolio. The Council is structured into four departments but reports through seven Cabinet Member Portfolios. These portfolios are Adult Care, Corporate Services, Clean Growth and Regeneration, Health and Communities, Highways, Transport and Infrastructure, Strategic Leadership, Culture and Tourism and Young People. Revenue Expenditure The Council set its net budget requirement for 2019-20 on 6 February 2019 and originally planned to spend £519.532m, with funding coming in the form of Government non-ring-fenced grants of £161.444m, Council Tax of £329.430m, business rates collected locally of £19.195m and the use of Earmarked Reserves of £9.463m. In 2019-20 the Council has spent £539.583m, against a final net budget of £543.440m. The increase in net budget is because of additional net transfers from Earmarked and General Reserves of £10m, additional grant income of £12m (including Business Rates Relief Grant £6.357m, W inter Pressures Grant £3.627m and Independent Living Fund Grant £2.534m) and £2m additional business rates income. The table below summarises the Council’s outturn position, highlighting the Cabinet Member Portfolio net overspend and Corporate net underspend. The overall Council underspend for the year is £3.857m. Spending on schools is funded by the Dedicated Schools Grant (DSG), from Government. The Council received £359.020m in 2019-20. Note 38 sets out the DSG grant in more detail. The Council also has responsibility for Public Health funding. A total of £39.477m was received in 2019-20 in the form of a ring-fenced grant from Government to pay for Public Health services. There was an overspend against the balance of the grant of £0.022m. The outturn table shows the positions net of the impact of these grants, other ring-fenced grants and income from other third parties and their associated spend. 3 NARRATIVE REPORT Final Net Budget Actual Outturn £m £m £m Controllable: Adult Care 246.730 246.730 0.000 Corporate Services (formerly Council Services) 45.136 43.439 (1.697) Clean Growth and Regeneration (formerly Economic Development and Regeneration) 5.603 5.638 0.035 Health and Communities 4.433 4.171 (0.262) Highways, Transport and Infrastructure 79.888 78.069 (1.819) Strategic Leadership, Culture and Tourism 13.175 13.153 (0.022) Young People 110.700 117.555 6.855 Portfolio Outturn 505.665 508.755 3.090 Risk Management 6.155 0.000 (6.155) Debt Charges 28.833 29.327 0.494 Interest and Dividends Receivable (4.900) (6.050) (1.150) Levies and Precepts 0.332 0.335 0.003 Corporate Adjustments 7.355 7.216 (0.139) Total Outturn Position 543.440 539.583 (3.857) Transfers to / from reserves: RCCO - Capital Funded from Revenue 0.000 0.000 0.000 Transfer to Earmarked Reserves 58.564 58.564 0.000 Transfer from Earmarked Reserves (62.874) (62.874) 0.000 Use of General Reserves (19.282) (19.282) 0.000 Contribution into General Reserve 4.403 8.260 3.857 524.251 524.251 0.000 Financed By: Council Tax (329.430) (329.430) 0.000 Revenue Support Grant (13.517) (13.517) 0.000 Business Rates (20.984) (20.984) 0.000 Business Rates Top-up (93.370) (93.370) 0.000 Business Rates Relief Grant (7.603) (7.603) 0.000 New Homes Bonus (2.098) (2.098) 0.000 Other General Revenue Grants (46.745) (46.745) 0.000 PFI Grant (10.504) (10.504) 0.000 (524.251) (524.251) 0.000 Departments have continued to look for ways of working more efficiently and effectively to cut costs or generate additional income and set aside cash for future years when further budget reductions will be needed. 4 NARRATIVE REPORT There continues to be pressure on social care, which has resulted in a significant overspend in the Young People portfolio. The overspend in Young People was, in the main, driven by increased demand for Social Care support, such as placements for children in care, alternative arrangements for children unable to live with parents and increased numbers of children whose safety and well-being needs to be monitored through child protection plans and associated social worker support. Although the Adult Care portfolio reported a breakeven position for 2019-20, this was affected by two large end of year adjustments. The first was for a credit loss allowance against its debtors at 31 March 2020. The loss allowance was £2.222m higher than in 2018-19 because of Covid-19 influencing the expected likelihood of recovery of amounts owed. It may be possible to offset any loss which is ultimately realised against grant funding provided by Government towards the costs of Covid-19. There was also a transfer to earmarked reserves of £3.807m towards funding the Better Lives Project, which is a joint initiative with Newton Europe, in which Adult Care is reviewing and revising its work processes, especially around the assessment of need and selection of the most appropriate care packages for Derbyshire’s residents. The Adult Care portfolio underspend before these two adjustments was £6.029m. This underspend occurred because of a number of factors, including reductions in high cost placements, reduced spend on the Integrated Community Equipment Service and high levels of unfilled vacancies in the Social W ork and Finance teams. The main area of underspend in the Highways, Transport and Infrastructure portfolio was on waste management costs, which were less than expected due to waste tonnages being lower than originally forecast and because of additional short term savings from new service continuity arrangements. The portfolio underspend has also increased because Gold Card concessionary fares costs were less than anticipated due to reduced demand for public transport services. However, this underspend has been partially offset by an overspend on winter maintenance. The underspend in the Corporate Services portfolio is mainly down to staffing vacancies not being filled in order to assist with the management of a number of staffing reviews and restructures.